By Phil Franz-Warkentin and Dave Sims, Commodity News Service Canada
March 27, 2014
Winnipeg – ICE Futures Canada canola contracts managed to settle with small gains on Thursday, after bouncing around both sides of unchanged in choppy activity.
May canola was up sixty cents per tonne at the close, but had been up by as much as five dollars per tonne at one point during the session. Follow-through speculative buying interest, together with some commercial demand helped prop up the futures, according to participants.
Ideas that the logistics issues across Western Canada are starting to show some improvement added to some of the earlier gains.
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However, outright trade volumes were on the light side and most of the buying interest was not consistent throughout the day. Farmer selling on the other side, as producers look to make some sales ahead of spring seeding, put some downward pressure on canola, according to traders.
Losses in the CBOT soy complex also spilled over to eventually pull canola back towards unchanged as well.
About 17,361 canola contracts were traded on Thursday, which compares with Wednesday when 17,740 contracts changed hands. Spreading accounted for 13,228 of the contracts traded.
Milling wheat, durum and barley futures were untraded and unchanged, after seeing some price revisions following Wednesday’s close.
CORN futures in Chicago rose four to seven cents a bushel on Thursday, on the back of the USDA’s export sales report. The USDA says importers have indicated they will buy 30 million tonnes of corn up to the end of August.
Cold temperatures in the US Midwest are expected to delay fieldwork ahead of spring planting.
SOYBEAN futures at the Chicago Board of Trade declined up to three cents per bushel on Thursday, after a weekly report by the USDA indicated 170,000 tonnes of purchases from the US had been cancelled.
While the cancellations were less than what was originally thought, more cancellations are expected later this year, according to an analyst.
There is also speculation that the USDA will predict increased seeding this year.
Brazilian soybeans are moving to US processors because of the tight supply situation and the high spread between the two markets.
SOYOIL futures ended 15 to 30 points lower on Thursday.
SOYMEAL futures ended slightly higher on Thursday, as speculators remain very long on soymeal supplies due to tight supplies in the Midwest, analysts said.
WHEAT futures in Chicago rose 10 to 13 cents per bushel as the U.S. Drought Monitor said drought conditions in the U.S. southern plains had worsened.
Over 90% of Kansas, the biggest American wheat producer, is now in a moderate to extreme drought. 24% of Oklahoma is in an extreme to exceptional drought, the report said.
US export demand has been substantial, but international competition has been putting pressure on US prices, an analyst said.
– There is a growing call in Australia to overhaul inefficient ports, in a bid to aid service growers.
– Concerns are being raised in China over the quality of some Australian Wheat supplies from last season.
– US Wheat Associates say Crimea accounted for 7 percent of Ukraine’s grain exports last year. The current geo-political turmoil is throwing uncertainty over the supply.
Settlement prices are in Canadian dollars per metric ton.
